West stonewalling democracy in Bahrain

West stonewalling democracy in Bahrain

Google Bahrain and you will see how inexcusably the popular uprising in the Persian Gulf sheikhdom is being blacked out by the mainstream media and how discriminatingly the Western leaders ignore the vociferous demands of a nation for democracy and social justice.

Bahraini protesters are arrested and systematically tortured on a daily basis. The head of a fact-finding mission set up by the Bahraini government to investigate reports of torture has said Manama uses the systematic policy of torture against protesters.

Cherif Bassiouni said on November 2, 2011 that he had found 300 cases of torture during his investigation.

“It is not possible to justify torture in any way, and despite the small number of cases, it is clear there was a systematic policy,” Bassiouni said in an interview with Egyptian daily Almasry Alyoum.

“I investigated and I found 300 cases of torture and I was helped in that by legal experts from Egypt and America,” he added.

Brian Dooley of Human Rights First gives a painful account of the ordeals the Bahraini protesters arrested by the Bahraini forces. He also talks about teenage boys severely beaten by the Saudi-backed forces:

“They beat us until they got tired, then other policemen would take over and beat us more,” said one boy.

On March 22, 2012, Bahraini activists released a footage detailing the rape of a child at the hands of the Saudi-backed forces in Bahrain. The footage which was enough to chill the spine and curdle the blood showed a handcuffed child with his pants down. He was badly beaten. He was left unconscious with his hands tied behind his back. He was discovered lying in a street in the village of Sanabis, outside of Manama.

Kangaroo courts are rampant in Bahrain. In a 94-page report titled No Justice in Bahrain: Unfair Trials in Military and Civilian Courts in February 2011, the Human Rights Watch blasted the grotesquely Kafkaesque trials in the country, saying such trials were crass and politically motivated.

“Grossly unfair military and civilian trials have been a core element in Bahrain’s crackdown on pro-democracy protests,” said Joe Stork, deputy Middle East director at HRW.

“The government should remedy the hundreds of unfair convictions of the past year by dropping the cases against everyone convicted on politically motivated charges and by adopting effective measures to end torture in detention,” he noted.

The group also demanded Western countries to suspend all military and security-related sales to the regime until the government fully addresses the violations.

“These violations reflect serious, systematic problems with Bahrain’s criminal justice system and the role of the military and intelligence services in state oppression,” the report pointed out.

Western governments shamefully help the autocratic regime of Al Khalifa to quell the protests by providing weapons and military equipment to the government. New official figures disclose that Britain continues to sell arms to Bahrain. According to the figures, the British government approved the sale of “military equipment valued at more than £1m in the months following the violent crackdown on demonstrators a year ago. They included licenses for gun silencers, weapons sights, rifles, artillery and components for military training aircraft” (The Guardian 14 February 2012). Also, in July and September, naval guns and components for detecting and jamming improvised explosive devices were exported to the monarchy.

In 2010, the US which has its Navy’s Fifth Fleet in Bahrain, sold over $200 million worth of weapons to the country, up from $88 million in 2009. In September 2011, the United States delayed a US$53 million arms sale to Bahrain for its possible concerns for the human rights violations in the country and the severe criticism by human rights groups. For instance, Maria McFarland of Human Rights Watch said, “This is exactly the wrong move after Bahrain brutally suppressed protests and is carrying out a relentless campaign of retribution against its critics. By continuing its relationship as if nothing had happened, the US is furthering an unstable situation.”

However, in a January 27, 2012 statement, the US State Department said it was planning to push ahead with the sale of approximately $1 million of equipment to Bahrain. All of a sudden, the US decided that Bahrain is an “important force for political stability and economic progress in the Middle East” and that they should do their best to provide the regime with all sorts of military equipment including 44 Humvees, more than 50 bunker-buster missiles and night-vision technology.

In reaction to the opposition of human rights activists, a US State Department official said that Washington “weighs the economic, national security, foreign policy and human rights implications of any proposed transfer of arms very carefully”.

The official who spoke on the condition of anonymity due to the sensitivity of the matter added, “We view the proposed sale as one that would help Bahrain’s defense force develop its capabilities against external threats and would ensure interoperability with our forces” (The Washington Post September 29, 2011).

Apart from having at his disposal UK and US weapons, Bahrain’s king Hamad bin Isa al-Khalifa has reportedly received some bezels of wisdom in cracking down on the protesters from the notorious British Colonel Ian Henderson AKA the Butcher of Bahrain. Ian Henderson is an enigmatic personality who is well-versed in military tactics and torture. A British citizen whose very name conjures up images of appalling torture methods, he used torture to crush the Mau Mau Uprising in Kenya, and later the 1990s uprising in Bahrain. It is widely speculated that Henderson has orchestrated the crackdown in Bahrain. He is charged with torturing Bahrainis while he served as the head of state security in Bahrain for approximately 30 years. According to political dissidents, he resorted to torture as a means to quell the opposition movement in Bahrain back in the nineties.

What seems to be of paramount importance is that he must have acted under the guidance of the British government. The complicity of the British government in the torture of the Bahraini dissidents has long been a matter of controversy. On 3 June 1997, at a parliamentary session, former MP George Galloway described Ian Henderson as “Britain’s Klaus Barbie” and said, “Henderson might have walked from the fevered pages of a Graham Greene novel. He was an interrogator of the Mau Mau during colonial rule in Kenya in the bitter struggle for independence. So brutally efficient were his methods that, on obtaining independence for Kenya, Jomo Kenyatta tried to re-engage him in his own security apparatus. So notorious was Henderson that a demonstration was mounted by his victims and the whole affair became so scandalous that Kenyatta was forced to deport him. Via Ian Smith’s Rhodesia, he ended up as the right hand man of the Al-Khalifa. In the Gulf, Henderson is known as the butcher of Bahrain. He is the head of the security services and director of intelligence and has gathered around him the kind of British dogs of war, mercenaries, whose guns and electric shock equipment are for hire to anyone who will pay the price” (www.publications.parliament.uk).

Ian Henderson was honored by Queen Elizabeth II with the title “Commander of the Most Excellent Order of the British Empire” (CBE) in 1986. He was also honored by Government of Bahrain with Order of Bahrain 1st Class and Bahrain Meritorious Service Medal 1st Class.

The West blatantly pontificates about democracy in the Middle East and North Africa and shuts its ears to the excruciating cry for social justice in Bahrain. To crown it all, it provides the regime with every means to carry out its brutality and crackdown.

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China rejects Obama’s Iran oil import sanctions

China rejects Obama’s Iran oil import sanctions

NewsOK

BEIJING (AP) — China rejected President Barack Obama’s decision to move forward with plans for sanctions on countries buying oil from Iran, saying Saturday that Washington had no right to unilaterally punish other nations.

South Korean officials said they will continue working with the U.S. to reduce oil imports from Iran, as other U.S. allies who depend on Iranian oil worked to find alternative energy supplies.

Obama announced Friday that he is plowing ahead with the potential sanctions, which could affect U.S. allies in Asia and Europe, as part of a deepening campaign to starve Iran of money for its disputed nuclear program. The U.S. and allies believe that Iran is pursuing a nuclear bomb; Iran denies that.

China is one of the biggest importers of Iranian oil, and its Foreign Ministry reiterated its opposition to the U.S. moves.

“The Chinese side always opposes one country unilaterally imposing sanctions against another according to domestic law. Furthermore it does not accept the unilateral imposition of those sanctions on a third country,” the ministry said in a brief statement Saturday.

Beyond the rhetoric, Beijing has taken a two-pronged approach to the U.S. demands, insisting that China has the right to import oil from Iran or any other country while quietly reducing imports of Iranian oil. Though the government has not explained the reductions, oil traders and industry executives have said it may stem more from a pricing dispute with Iran than as a response to U.S. pressure.

Behind the scenes, Washington has repeatedly encouraged Beijing to seek supplies elsewhere, and Saudi Arabia offered to fill a shortfall when Chinese Premier Wen Jiabao visited Gulf countries early this year.

The looming U.S. sanctions aim to further isolate Iran’s central bank, which processes nearly all of the Iran’s oil purchases, from the global economy. Obama’s move clears the way for the U.S. to penalize foreign financial institutions that do oil business with Iran by barring them from having a U.S.-based affiliate or doing business here.

What Gives Obama the Right To Interfere In the Business Affairs of Sovereign Nations?

[Obama has neither the right nor the authority to disrupt economic relations between other nations.  He does not have the right to dictate the scientific or research efforts of Iran.  He most certainly does not have either the right or the authority to to invade foreign nations, in order to force them to accept his demands—No matter what any piece of paper from the so-called “United Nations” might hand him!  American actions, in regards to Iran, are actually sufficient grounds for war, by any civilized standards, if recent assassinations of scientists and other terrorist acts can be conclusively linked to the United States or Israel.  Interference in Iranian and Pakistani affairs (Peace Pipeline), among others, are likewise adequate grounds to take the American aggressors to the UN Security Council.]

Barack Obama

Oil markets remain tight, the White House said. Surging gasoline prices have become a major issue in the presidential election campaign.

Reuters

BURLINGTON, Vt./WASHINGTON: US President Barack Obama vowed on Friday to forge ahead with tough sanctions on Iran, saying there was enough oil in the world market – including emergency stockpiles – to allow countries to cut Iranian imports.

In his decision, required by a sanctions law he signed in December, Obama said increased production by some countries as well as “the existence of strategic reserves” helped him come to the conclusion that sanctions can advance.

“I will closely monitor this situation to assure that the market can continue to accommodate a reduction in purchases of petroleum and petroleum products from Iran,” he said in a statement.

Obama had been expected to press on with the sanctions to pressure Iran to curb its nuclear program, which the West suspects is a cover to develop atomic weapons but which Iran says is purely civilian.

The overt mention of government-controlled stockpiles may further stoke speculation that major consumer nations are preparing to tap their emergency stores this year.

“I do think it was interesting that it was laid out there,” said David Pumphrey, an analyst at theCenter for Strategic and International Studies.

“It was sort of like a reminder that yes, this is part of the tool kit,” said Pumphrey, a former Energy Department official.

NO DECISION ON STRATEGIC RELEASE

Oil markets remain tight, the White House said. Surging gasoline prices have become a major issue in the presidential election campaign.

“A series of production disruptions in South Sudan, Syria, Yemen, Nigeria, and the North Sea have removed oil from the market,” the White House said in a statement.

France is in talks with the United States and Britain on a possible release of strategic oil stocks to push fuel prices lower, French ministers said on Wednesday.

Senior Obama administration officials told reporters that the United States views releasing emergency stocks as an option, but said no decision has been made on specific actions.

Oil prices briefly rallied by about 70 cents on the announcement, but later reversed gains to end almost flat as traders turned mindful of the possible use of reserves.

“There’s been a shift from focus on a threat (by Iran) to close the Strait of Hormuz to whether or not reserves are going to be released,” said Dominick Caglioti, a broker at Frontier Trading Co. inNew York.

PUTS IMPORTERS ON NOTICE

Going forward, Obama is required by law to determine every six months whether the price and supply of non-Iranian oil are sufficient to allow consumers to “significantly” cut their purchases from Iran.

The law allows Obama, after June 28, to sanction foreign banks that carry out oil-related transactions with Iran’s central bank and effectively cut them off from the U.S. financial system.

“Today, we put on notice all nations that continue to import petroleum or petroleum products from Iran that they have three months to significantly reduce those purchases or risk the imposition of severe sanctions on their financial institutions,” said Senator Robert Menendez, co-author of the sanctions law.

Obama can offer exemptions to countries that show they have “significantly” cut their purchases from Iran, and recently exempted Japan and 10 EU countries from the sanctions.

A senior administration official told reporters that talks continue with China, India, South Korea and other importers.

“Each day I think really we see a number of positive indicators from a broad range of countries,” the official said, citing an announcement by Turkey on Friday that it would cut imports of oil from Iran by 10 percent as an example.

NEW SANCTIONS IN THE WORKS

Obama faces a delicate balancing act on Iran, leading up to November U.S. general election. On the one hand, he must show voters he is being tough on the Islamic state.

But with oil and gasoline prices surging in response to geopolitical risks, he must also avoid steps that would unduly rattle oil markets. That could threaten the global economy and hurt voters already angered by the rising cost of fuel.

Obama also faces pressure from some lawmakers in Congress who want to make sanctions on Iran even tighter. The House of Representatives has already passed additional sanctions, and a bill is pending in the Senate.

Senior administration officials briefing reporters declined comment on the proposed new sanctions.

“We welcome the president’s determination and applaud the administration’s faithful implementation of the Menendez-Kirk amendment,” said a spokesman for Senator Mark Kirk, a Republican who has pushed for additional measures.

“To build on this momentum, we hope the Senate will consider amendments to the pending Iran sanctions bill that would continue to increase the economic pressure on the Iranian regime,” Kirk’s spokesman said.

Syria declares it has defeated revolt

Syria declares it has defeated revolt

Syrian anti-regime protesters waving pre-Baath Syrian flags during a demonstration in Dael in the southern Syrian province of Daraa (AFP PHOTO/GENERAL COMMITTEE OF THE SYRIAN REVOLUTION)

Syrian anti-regime protesters waving pre-Baath Syrian flags during a demonstration in Dael in the southern Syrian province of Daraa (AFP PHOTO/GENERAL COMMITTEE OF THE SYRIAN REVOLUTION)

DAMASCUS: Syria declared Saturday it had defeated those seeking to bring down the regime while reiterating support for a UN-Arab peace plan, as its troops reportedly shelled rebels in the flashpoint city of Homs.

Foreign ministry spokesman Jihad Makdisi, cited by the official SANA news agency, also said that Syrian troops would withdraw from urban areas once they had been stabilised.

The United Nations says more than 9,000 people have been killed in the crackdown by forces of President Bashar al-Assad on an Arab Spring-inspired uprising that began a year ago with pro-democracy protests.

“The battle to topple the state is over, and the battle to solidify stability… and move on towards a renewed Syria has begun,” Makdisi said in an interview originally carried on state television.

The spokesman said the Assad government’s focus was also to “rally visions behind the reform process” and “prevent those who seek to sabotage reform.”

Troops would withdraw from urban areas once they were secured, he said, adding UN-Arab League envoy Kofi Annan acknowledged there were “illegitimate armed elements within the opposition”.

“The presence of the Syrian Arab army in Syrian cities is for defensive purposes (so) as to protect the civilians,” Makdisi was quoted as saying by SANA.

“Once peace and security prevail, the army is to pull out,” he added.

SANA said that Makdisi made the appearance on television in a bid to explain to Syrians why the government had this week accepted Annan’s six-point peace plan.

Annan appealed for an immediate ceasefire on Friday, as monitors said at least 39 people — all but seven of them civilians — were killed across Syria as security forces sought to crush the popular uprising.

Shells rained down on Homs on Friday, as thousands of people took to the streets across Syria to protest against what they regard as the inaction of Arab governments dealing with the crisis.

The Syrian Observatory for Human Rights monitoring group said that the Homs neighbourhood of Khaldiyeh, one of the main rebel bastions, came under renewed rocket fire from the military again on Saturday morning.

US Secretary of State Hillary Clinton was to hold talks on Saturday with Gulf Arab leaders aimed at putting pressure on Syria’s regime to stop its bloody protest crackdown.

Clinton is expected to hold the talks in Riyadh before a “Friends of Syria” meeting in Istanbul on Sunday which ministers from dozens of Arab and Western countries are due to attend.

But there are differences over how to help the Syrian people in their bid for democracy.

Saudi Arabia and its neighbour Qatar have called for arming the opposition, which includes the Free Syrian Army made up of Syrian military defectors.

An Arab League summit in Baghdad this week rejected the option of arming any side, and called on all parties to engage in a “serious national dialogue.”

On Friday, Clinton discussed with Saudi leaders efforts to send more humanitarian aid into Syria, and support opposition efforts to present a united and inclusive political vision for the future.

They also discussed tightening the array of US, European, Canadian, Arab and Turkish sanctions on Syria, a US State Department official said.

The United States and Turkey have agreed on the need to provide communications and other non-lethal aid to the opposition.

In Washington, the Treasury Department announced it was targeting Defence Minister Dawoud Rajiha as well as the army’s deputy chief of staff and the head of presidential security, in its latest round of sanctions against Damascus.

The United Nations is making plans for a Syria ceasefire observer mission if hostilities are halted, but the Damascus government has not even approved sending officials for talks, UN officials said.

The preliminary planning for the force is part of contacts between Annan and Assad’s government.

A UN official in New York said a minimum of 250 observers would be needed if the Syrian government halted its offensive on protesters and gave its agreement for the international force.

Annan’s peace plan calls for a commitment to stop all armed violence, a daily two-hour humanitarian ceasefire, media access to all areas affected by the fighting, an inclusive Syrian-led political process, a right to demonstrate, and release of arbitrarily detained people.

– AFP/fa

Lawyer says U.S. blocks investigation of Afghan massacre

Lawyer says U.S. blocks investigation of Afghan massacre

Attorney John Henry Browne (R), civil legal counsel to Joint Base Lewis McChord (JBLM) based soldier Staff Sgt. Robert Bales, the then-deployed U.S. Army soldier accused of murdering 17 Afghan civilians earlier this month, speaks in a press conference in his Seattle, Washington office March 30, 2012. REUTERS-Anthony Bolante
Staff Sgt. Robert Bales, (L) 1st platoon sergeant, Blackhorse Company, 2nd Battalion, 3rd Infantry Regiment, 3rd Stryker Brigade Combat Team, 2nd Infantry Division, is seen during an exercise at the National Training Center in Fort Irwin, California, in this August 23, 2011 DVIDS handout photo. REUTERS-Department of Defense-Spc. Ryan Hallock-Handout

By Bill Rigby

SEATTLE

(Reuters) – The lawyer defending the U.S. soldier accused of murdering 17 Afghan civilians claims U.S. authorities are blocking his ability to investigate the incident.

John Henry Browne, the lawyer for Staff Sergeant Robert Bales, said U.S. forces in Afghanistan have prevented his team from interviewing injured civilians at a hospital in Kandahar, and are allowing other potential witnesses to scatter, making it difficult to track them down.

“When prosecutors don’t cooperate, it’s because they are concerned about the strength of their case,” said Browne at a press conference at his downtown Seattle office on Friday.

Bales was formally charged last week with the murders of eight adults and nine children in a pre-dawn shooting rampage in southern Afghanistan on March 11, which further eroded U.S.-Afghan relations already strained by a decade of war.

He could face the death penalty if convicted.

No date has been set for a trial, but U.S. military prosecutors are putting together their case while Browne is preparing his defense.

Browne said he has a team of investigators in Afghanistan now, but they are receiving little cooperation from military prosecutors who filed the charges.

“We are facing an almost complete information blackout from the government, which is having a devastating effect on our ability to investigate the charges preferred against our client,” he said in a statement released earlier on Friday.

A reliable account of the events of the night of the massacre has not yet emerged. A recent report indicated Afghan villagers doubt Bales acted alone. Other reports suggest Bales left his base twice during the night.

“I don’t believe that’s the case, but we don’t know for sure at this point,” Browne said on Friday.

Browne said his investigators had spoken to U.S. soldiers in Afghanistan but had not managed to contact any witnesses.

DENIED ACCESS

“When we tried to interview the injured civilians being treated at Kandahar Hospital we were denied access and told to coordinate with the prosecution team,” Browne said in the earlier statement.

“The next day the prosecution team interviewed the civilians injured. We found out shortly after the prosecution interviews of the injured civilians that the civilians were all released from the hospital and there was no contact information for them.” That means potential witnesses will scatter and could prove unreachable, Browne said.

Prosecutors had not shared their investigative findings with his team, and would not share images captured by a surveillance camera on a blimp above the base which the Army says shows Bales returning to the camp after the alleged shooting, he said.

The next step in the case is for Bales – who is being held at a military detention center at Fort Leavenworth, Kansas – to undergo a mental assessment by Army doctors independent of both the prosecution and defense, to determine if he is fit to stand trial, known as a “sanity board” in the Army.

That could take several months, Browne said.

After that has occurred, the military justice system requires a preliminary hearing, known as an “Article 32” hearing, to establish whether there is a strong enough case to proceed to a court martial.

Browne said it was too early to say whether post-traumatic stress disorder would feature in his defense against the charges. “I don’t know whether it will at all,” said Browne.

“First thing we have to find out is whether the government has a case. Until we’re convinced the government has a case, we’re not going to start speculating on what our defenses are going to be.”

(Reporting By Bill Rigby; Editing by Todd Eastham and Paul Simao)

Former Soviet KGB spy chief commits suicide

Former Soviet KGB spy chief commits suicide

Former Soviet KGB spy chief commits suicideEx-Soviet KGB foreign intelligence chief Leonid Shebarshin was found dead in his Moscow apartment on March 30 in an apparent suicide, Russian investigators said.ria.ru

Reuters

MOSCOW – Ex-Soviet KGB foreign intelligence chief Leonid Shebarshin was found dead in his Moscow apartment on March 30 in an apparent suicide, Russian investigators said.

Shebarshin, 77, who headed the First Chief Directorate, a foreign intelligence service within the KGB during 1989-1991, appeared to have committed suicide, the Investigative Committee said on its website http://www.sledcom.ru. A gun, which he was awarded upon retirement, was discovered near his body.

Police also found a suicide note on the scene, Interfax news agency quoted a police official as saying.

The ex-spy, fluent in Urdu, worked on assignments in Pakistan, India and Iran in the 1950s-1970s. He was appointed deputy chief of foreign intelligence in 1987, and promoted to head the service in 1989.

Shebarshin briefly occupied the KGB’s top post after the failed August 1991 hardline coup, intended to halt president Mikhail Gorbachev’s reforms paved the way for the collapse of the communist party, the end of the Soviet Union and the creation of the present-day Russian state.

He resigned from active service shortly after the coup.

Read more: http://www.kyivpost.com/news/russia/detail/125248/#ixzz1qdk4PpJj

Pipe to nowhere?

Pipe to nowhere?

By Safiya Aftab

Trilateral summit

International sanctions against Iran may end Pakistan’s hopes of importing gas to deal with its energy crisis

The Iran-Pakistan pipeline may be the only way to go if Pakistan wants to continue using its gas transmission infrastructure and avoid fuel conversion expenses. But the option will not be easy to implement.

The pipeline was first proposed in 1994, and was supposed to extend to India. Eighteen years on, India has effectively bowed out, Pakistan’s energy crisis has assumed dire proportions, and Iran is facing crippling international sanctions as punishment for its purported nuclear ambitions. So where do things stand?

The government of Pakistan has come out strongly in support of the project, asserting in mid-February that the pipeline will go through, even as Iran is increasingly isolated in the international community.

As of August 2011, NESPAK had completed a reconnaissance survey of the 800km part of the pipeline that is to pass through Pakistan’s territory. It is currently preparing a feasibility study in collaboration with a German firm ILF. The government says the construction of the Pakistan section will be complete by December 2013. Iran has almost finished putting in the necessary infrastructure on its side of the border. Pakistan will have to start paying $2 million a day to Iran in penalties if it does not go through with the project.

Meanwhile, the pressure on Iran and on all parties who have any form of financial dealing with Iran is building up. Buyers of Iranian oil (most recently South Korea and India) are unable to repatriate payments to the country, as Iranian banks can no longer carry out transactions in dollars. The sanctions are aimed particularly at the energy sector (upstream, as well as on shipping of Iranian oil), and are leading to a withdrawal of international oil and gas companies from the country. Iran has the world’s second largest proven reserves of natural gas, and is part owner, along with Qatar, of the South Pars gas field, which is supposed to be the world’s largest field. This is also the field from which the Iran-Pakistan pipeline is supposed to originate. In spite of this endowment, Iran ranks only 25th in the international list of gas exporters, as it does not have the financial or technical resources to develop its fields. Qatar has become the world’s leading liquefied natural gas exporter using the same field, while Iran is facing a steady decline in its already relatively low level of exports.

For now, the biggest issue is financing. Inter-State Gas Systems (ISGS), the company handling the proposed project in Pakistan, estimates the cost of pipeline construction at $1.2 billion. It envisaged raising 30% (or about $373 million) of this in the form of equity, while the remaining would be debt. Of the total equity stakes, 51% are supposed to come from the public sector in Pakistan, while international investors are supposed to make up the remaining. The loans were, of course, to come from international financial institutions.

But as a result of the sanctions on Iran, Pakistan is having difficulty finding financiers. Even if the government manages to put up the 51% equity, getting the remaining funds will be a struggle. In January this year, the National Bank of Pakistan and the Oil and Gas Development Corporation (OGDC) decided to withdraw from the project for fear of repercussions on their international operations and withdrawal of foreign investment respectively. Most international banks will not touch the project. More worrying, China, which was long considered a supporter of the project, has gone silent in spite of the fact that the government of Pakistan appointed, in December 2011, the Industrial and Commercial Bank of China as the leader of a consortium that will act as financial advisors to the project.

Iran itself has offered to finance Pakistan’s share of the pipeline construction costs, but this is not a credible offer given its own straitened circumstances. Russia’s Gazprom has reportedly shown interest, which may be an option worth exploring.

So what are Pakistan’s options?

The cautious option is to just let the project die a natural death, while posturing valiantly in favor of Iran. The Iranian government can hardly blame any country for backtracking on any deal with it, in the current situation. Pakistan can cite extenuating circumstances and simply put the project on the back-burner for another (sunnier) day. There are indications that Pakistan may already be buying time. It has indicated that it wants to review the price – bringing it down from the currently agreed 78% of crude oil parity to 70% (something that Iran is likely to agree to readily in the circumstances). It has also, just before the recent heads of government meeting in Islamabad, asked Iran to have its reserves verified by the third party.

But Pakistan needs the gas for the longer term. The proposed TAPI pipeline which traverses Afghanistan is a non-starter. And while LNG imports from Qatar can help fill the gap at least for power generation, it is not a substitute for a long-term supply of natural gas, which is expected to generate up to $100 billion in savings over 25 years. There is the issue of the reparations that are to be made to Iran if Pakistan backs out. There is the issue of not really having any viable alternatives – the US for all its huffing and puffing hasn’t put anything concrete on the table and is unlikely to do so, given how hostile the US Congress is becoming towards Pakistan. And lastly, there is the issue of saving face – Pakistan has really gone out on a limb to support Iran in its current crisis. Having taken on the US and others so boldly, can it now just backtrack? Alternatively, can it afford to take on a fight with yet another neighbor?

Even if everything goes on schedule, the pipeline will not be in place for another three years. A lot can change in that timeframe. For now, it appears to be in Pakistan’s interests to continue to pursue the project as best as it can, without being overtly aggressive towards the international community. There may well be wiggle room that will allow Pakistan to proceed without necessarily being on the wrong side of international law. No payments are being made to Iran just yet, and in any case, the bilateral agreements on the pipeline pre-date the latest Security Council sanctions that seek to limit trade with Iran. Pakistan should avoid making grand or provocative gestures, but financing options should be explored in earnest, and the project should not be abandoned.

Pipe to nowhere?

 5 5

The Iran-Pakistan pipeline may be the only way to go if Pakistan wants to continue using its gas transmission infrastructure and avoid fuel conversion expenses. But the option will not be easy to implement.

The pipeline was first proposed in 1994, and was supposed to extend to India. Eighteen years on, India has effectively bowed out, Pakistan’s energy crisis has assumed dire proportions, and Iran is facing crippling international sanctions as punishment for its purported nuclear ambitions. So where do things stand?

The government of Pakistan has come out strongly in support of the project, asserting in mid-February that the pipeline will go through, even as Iran is increasingly isolated in the international community.

As of August 2011, NESPAK had completed a reconnaissance survey of the 800km part of the pipeline that is to pass through Pakistan’s territory. It is currently preparing a feasibility study in collaboration with a German firm ILF. The government says the construction of the Pakistan section will be complete by December 2013. Iran has almost finished putting in the necessary infrastructure on its side of the border. Pakistan will have to start paying $2 million a day to Iran in penalties if it does not go through with the project.

Meanwhile, the pressure on Iran and on all parties who have any form of financial dealing with Iran is building up. Buyers of Iranian oil (most recently South Korea and India) are unable to repatriate payments to the country, as Iranian banks can no longer carry out transactions in dollars. The sanctions are aimed particularly at the energy sector (upstream, as well as on shipping of Iranian oil), and are leading to a withdrawal of international oil and gas companies from the country. Iran has the world’s second largest proven reserves of natural gas, and is part owner, along with Qatar, of the South Pars gas field, which is supposed to be the world’s largest field. This is also the field from which the Iran-Pakistan pipeline is supposed to originate. In spite of this endowment, Iran ranks only 25th in the international list of gas exporters, as it does not have the financial or technical resources to develop its fields. Qatar has become the world’s leading liquefied natural gas exporter using the same field, while Iran is facing a steady decline in its already relatively low level of exports.

For now, the biggest issue is financing. Inter-State Gas Systems (ISGS), the company handling the proposed project in Pakistan, estimates the cost of pipeline construction at $1.2 billion. It envisaged raising 30% (or about $373 million) of this in the form of equity, while the remaining would be debt. Of the total equity stakes, 51% are supposed to come from the public sector in Pakistan, while international investors are supposed to make up the remaining. The loans were, of course, to come from international financial institutions.

But as a result of the sanctions on Iran, Pakistan is having difficulty finding financiers. Even if the government manages to put up the 51% equity, getting the remaining funds will be a struggle. In January this year, the National Bank of Pakistan and the Oil and Gas Development Corporation (OGDC) decided to withdraw from the project for fear of repercussions on their international operations and withdrawal of foreign investment respectively. Most international banks will not touch the project. More worrying, China, which was long considered a supporter of the project, has gone silent in spite of the fact that the government of Pakistan appointed, in December 2011, the Industrial and Commercial Bank of China as the leader of a consortium that will act as financial advisors to the project.

Iran itself has offered to finance Pakistan’s share of the pipeline construction costs, but this is not a credible offer given its own straitened circumstances. Russia’s Gazprom has reportedly shown interest, which may be an option worth exploring.

So what are Pakistan’s options?

The cautious option is to just let the project die a natural death, while posturing valiantly in favor of Iran. The Iranian government can hardly blame any country for backtracking on any deal with it, in the current situation. Pakistan can cite extenuating circumstances and simply put the project on the back-burner for another (sunnier) day. There are indications that Pakistan may already be buying time. It has indicated that it wants to review the price – bringing it down from the currently agreed 78% of crude oil parity to 70% (something that Iran is likely to agree to readily in the circumstances). It has also, just before the recent heads of government meeting in Islamabad, asked Iran to have its reserves verified by the third party.

But Pakistan needs the gas for the longer term. The proposed TAPI pipeline which traverses Afghanistan is a non-starter. And while LNG imports from Qatar can help fill the gap at least for power generation, it is not a substitute for a long-term supply of natural gas, which is expected to generate up to $100 billion in savings over 25 years. There is the issue of the reparations that are to be made to Iran if Pakistan backs out. There is the issue of not really having any viable alternatives – the US for all its huffing and puffing hasn’t put anything concrete on the table and is unlikely to do so, given how hostile the US Congress is becoming towards Pakistan. And lastly, there is the issue of saving face – Pakistan has really gone out on a limb to support Iran in its current crisis. Having taken on the US and others so boldly, can it now just backtrack? Alternatively, can it afford to take on a fight with yet another neighbor?

Even if everything goes on schedule, the pipeline will not be in place for another three years. A lot can change in that timeframe. For now, it appears to be in Pakistan’s interests to continue to pursue the project as best as it can, without being overtly aggressive towards the international community. There may well be wiggle room that will allow Pakistan to proceed without necessarily being on the wrong side of international law. No payments are being made to Iran just yet, and in any case, the bilateral agreements on the pipeline pre-date the latest Security Council sanctions that seek to limit trade with Iran. Pakistan should avoid making grand or provocative gestures, but financing options should be explored in earnest, and the project should not be abandoned.